Cryptocurrency Use in Crime Surges in Western Balkans, Seizures Lag

Cryptocurrency is increasingly being used in criminal activities across the Western Balkans, according to a recent report by the Global Initiative Against Transnational Organized Crime (GI-TOC). The NGO found that tens of millions of euros linked to criminal networks in the region have been routed through crypto wallets, highlighting the growing role of digital currencies in illicit activities.

The Western Balkans, which includes nations such as Albania and Serbia, has seen only three documented cases of crypto seizure, all of which occurred in the last few years. This limited number of seizures underscores the challenges faced by local authorities in tracing and seizing illicitly sourced cryptocurrencies. The region's transaction volumes in cryptocurrency sit between $25 billion and $30 billion, indicating a significant presence of digital currencies in both legitimate and illegal activities.

Montenegro has emerged as a major European node for the use of crypto on darknet marketplaces, while Albania and Serbia have seen a rise in using crypto to launder the proceeds of drug trafficking. Sasa Djordjevic, GI-TOC’s senior analyst for the Western Balkans, noted that cryptocurrencies are playing an increasingly significant role in criminal activities, including fraud and illegal crypto-mining. Drug trafficking groups are particularly using crypto to move and hide their profits, with some suspicious transactions linked to criminal networks worth tens of millions of euros.

These transactions are often routed through crypto wallets and reinvested into legal businesses, making it difficult for authorities to track the illicit funds. The patterns of these transactions mirror known cocaine trafficking routes from Latin America to Europe, and there have been observed connections between criminal actors in the Western Balkans and darknet markets such as Hydra, which was shut down in 2022.

GI-TOC’s latest bulletin suggests that illicit usage of cryptocurrency will continue to grow in the region, as local authorities struggle to keep up with the pace of change in terms of regulations, technical expertise, and cross-border cooperation. Currently, only three out of the six Western Balkan countries have adopted laws on digital assets, and implementation has yet to begin in one of them. Albania, Serbia, and Kosovo are the countries that have introduced cryptocurrency legislation, but the necessary bylaws for implementation have not yet been adopted.

The EU’s MiCA regulation offers a path toward stronger oversight, but full and consistent implementation across the region remains challenging, as the Western Balkans are not yet part of the EU. Until regulatory and enforcement capacities are strengthened, the region will remain vulnerable to illicit crypto activity. The most recent seizure involved an Albanian crime syndicate, where forces from Albania, Belgium, the Netherlands, Spain, and Europol seized the gang’s cash, bank accounts, and other property, including hardware wallets containing $10 million in cryptocurrencies.

However, such examples are still few and far between. Djordjevic and GI-TOC emphasize that the situation won’t improve until the region’s authorities catch up with the pace of change. This means that governments should adopt and enforce clear regulations for tracing and seizing illicit crypto, and law enforcement must invest in advanced blockchain tools and specialized training. Implementing FATF recommendations and EU rules on crypto remains key, particularly for countries previously on the FATF grey list. Closer cooperation with Europol, Interpol, and other national agencies is also a necessity to effectively combat the growing use of cryptocurrency in criminal activities.